Double Tax Agreement with US (Spring 2015)
Are you a US citizen living in New Zealand?
If so, your income is subject to both USA and New Zealand income tax requirements.
The United States tax system requires its citizens and its resident aliens to report their worldwide income to the US Internal Revenue Service (IRS) regardless of where they live.
However, if you are a New Zealand tax resident, your New Zealand tax return is likely to require the same income returned here.
If you do have to pay tax in both the US and New Zealand, under the double tax agreement (DTA) between New Zealand and the US, you may be eligible for tax credits to offset some of the tax payable.
However, the rules for meeting your tax obligations and claiming tax credit entitlements are complex.
For example, if your income is in the form of a US pension or a lump sum payment related to past employment, you would not be able to claim foreign tax credits in New Zealand for taxes paid in the US on this income.
However, you may be able to claim New Zealand tax paid as a tax credit in your US income tax return.
Please let us know if this applies to you. We can help you meet your tax obligations and claim your tax credit entitlements.
If you have any questions or would like further information, please feel free to contact us.